01-27-1997 Council Packet - Laserfiche WebLink

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t \ Joint Powers Cities Report on Suburban Alliance, Page 3 the scope of the Suburban Alliance problem. The cities requested a one month delay in this recommendation, to see if a solution could be devised. City staff from Hopkins, Minnetonka, Plymouth and St. Louis Park have sought a solution during the last weeks. A workable solution to keep the agency open does not seem possible With great reluctance, a recommendation to close Suburban Alliance was made to all twenty one joint powers cities in early September. There seems to be consensus among the cities to close the agency’s doors by September 30, 1996 and to dissolve the joint powers agreement by January 31, 1997. The focus now has shifted to two issues: the orderly shut-down of Suburban Alliance, and the opening of discussions with Hennepin County about a new human services planning and coordination structure. The city attorneys ofMinnetonka and Plymouth/St. Louis Park have stated that legally the joint powers cities are responsible—jointly and severally—for the payment of the debt and costs associated with the agency shut down. The extent of the financial obligation will be discussed in the next section. The cities have devised an action plan to deal with all of the issues surrounding the shut down. This plan is attached. No deadlines are assigned to any of the action steps because the details are still under development. All member cities of the joint powers agreement must adopt a resolution dissolving the agency.. The joint powers agreement specifies that member cities have until August 1 of each year to declare their intent to leave the joint powers agreement at the end of the calendar year. If even one city does not take action to dissolve the agency, then Suburban Alliance will continue to exist until January 31,1998. This would not be a desirable situation. FINANCIAL IMPLICATIONS: The 1995 audit of Suburban Alliance, completed in 1996, pointed to some of the agency’s fiscal problems. While in 1996 Suburban Alliance appears to be operating within its budget, it is doing so w'ithout repaying 1995 debt and without having staff to perform core services. The primary reasons for the 1995 debt seem to be: • Suburban Alliance did not react promptly to cutbacks in federal and state funds, keeping staff employed without adequate funds for their salaries. Funding sources, such as emergency service dollars, were commingled in order to pay salaries. • Suburban Alliance, in 1994, was compelled to relocate from free space in St. Louis Park to leased space in Hopkins. The lease is for five years. Monthly rent is $3,000, and leasehold improvements were made which involve an additional $2,000 each quarter. Suburban Alliance has other outstanding obligations in addition to the debt owed to the emergency services providers. Listed below are estimates of these obligations: